The smart grid at work

Transcription

1 The smart grid at work Presented by: Luke Clemente, GM Smart Grid, GE Energy, T&D "Results are preliminary and unaudited. This document contains forward-looking statements - that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as expect, anticipate, intend, plan, believe, seek, see, or will. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: the severity and duration of current economic and financial conditions, including volatility in interest and exchange rates, commodity and equity prices and the value of financial assets; the impact of U.S. and foreign government programs to restore liquidity and stimulate national and global economies; the impact of conditions in the financial and credit markets on the availability and cost of GE Capital s funding and on our ability to reduce GE Capital s asset levels as planned; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so; the soundness of other financial institutions with which GE Capital does business; the adequacy of our cash flow and earnings and other conditions which may affect our ability to maintain our quarterly dividend at the current level; the level of demand and financial performance of the major industries we serve, including, without limitation, air and rail transportation, energy generation, network television, real estate and healthcare; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of proposed financial services regulation; strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses; and numerous other matters of national, regional and global scale, including those of a political, economic, business and competitive nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements. Luke Clemente, GM Smart Grid GE Energy This document may also contain non-gaap financial information. Management uses this information in its internal analysis of results and believes that this information may be informative to investors in gauging the quality of our financial performance, identifying trends in our results and providing meaningful period-to-period comparisons. For a reconciliation of non-gaap measures presented in this document, see the accompanying supplemental information posted to the investor relations section of our website at In this document, GE refers to the Industrial businesses of the Company including GECS on an equity basis. GE (ex. GECS) and/or Industrial refer to GE excluding Financial Services. 1 GE Energy Employees: 65, revenue: $38.6B Operating in 140 countries Power & Water Energy Services Oil & Gas Power generation Renewables Gas Engines Nuclear Gasification Water treatment Process chemicals Contractual agreements Smart Grid Field services Parts and repairs Optimization technologies Plant management Drilling/production for land, offshore, subsea LNG and pipelines Refining/petrochemical Industrial power gen Complete lifecycle services 2

2 Energy Services where smart grid fits in 08 revenue $10.3 billion Outage Services Contractual T&D Environmental Inspection & repair Uprates Life extension Multi-vendor services Turbines Power island Balance of plant Emissions testing O&M Smart Grid Grid decongestion Metering solutions Automation systems T&D projects Emissions reduction & control (NOx, Hg, PM) Thermal performance services Optimization & Control Asset condition monitoring Control solutions Optimization & diagnostic software Comprehensive plant services 3 The smart grid is integration of two infrastructures Electrical infrastructure Embracing renewables + Information infrastructure Increasing productivity Empowering consumers Reducing CO 2 emissions Increasing efficiency 4 Sources: (1) UtilityPoint, 2009 by General Ethan Electric Cohen Company. 7/18/0 (2) All EPRI Rights Intelligrid Reserved.

3 Geopolitical drivers 100% 40% 105% Amount of greenhouse gas emissions for which electricity generation accounts Amount global energy demand is expected to grow by 2030 UK residential electricity cost increases between Source: Army Corp of Engineers Source: U.S. Conference of Mayors resolution for Congress Source: Energy Information Administration 5 Coupled with utility industry challenges Rapid increase in energy consumption and cost Aging infrastructure requires increased investment Heavy distribution losses Policy and regulation drive influx of greener energy resources

4 The 4 E drivers Economic Competitiveness Energy Independence Empowerment of the Consumer Environmental Sustainability & Efficiency 7 The smart grid market continues to grow Estimated North American Smart Grid Market, ($Billions) $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 $4.9 CAGR = 20% $6.0 $7.0 $ System Coordination 6% CAGR Protection & Control Wide are network communications Network management systems Dynamic line rating sensors & technology Phasor Measurement Delivery Infrastructure 22% CAGR Smart Meters 31% CAGR AMI Communications Power Electronics Monitoring & Diagnostics Distribution Automation Substation Automation Smart grid technologies account for 27% of total utility spend in 2009 Smart meters account for single largest share of smart grid spend 2009 = 21% 2012 = 33% Integration & business services excluded from market analysis ~ tremendous market potential Demand Management 32% CAGR Load Management services In-Home displays and home management technologies Home area networks Distributed energy management systems Information Networks 17% CAGR Data historians Cyber-security Network management system communications Sources: GE Energy analysis; BCC Research; Newton-Evans; Frost & Sullivan; Thomas Weisel Partners; Utilities Telecom Council; Greentech Capital Advisors; AMR Research 8

5 And it keeps getting better Growth in GE smart grid orders, 2008 versus 2009* Globally 145% Growth in key markets: Eastern Europe: 36% North America: 336% Asia Pacific: 24% MEA: 70% India: 483% 9 GE Proprietary and Confidential. *Estimates for 2009 Global stimulus includes smart grid $70B $19B $10B $7B Expand power grid by 26,000 km, incl. new equipment by 2009 and 2010 $14.5 billion of guarantees for T&D and renewables $4.5 billion for Smart Grid, including federal matching funds Additional funding for India s power development program in order to reduce T&D energy losses by 15% Part A-$2B, SW/Auto Part B-$8B, Hardware Support trans- European infrastructure Energy Package, 80% smart meter coverage by 2020 EU 20/20/20 $3B $1B $0.5B $0.3B Ofgem - 500MM, four (4) Smart Towns Olympic village Regulation to reward grid efficiency and reliability Govt $100MM, two (2) Smart Cities Victoria required to achieve full smart meter coverage by 2013 Infrastructure: Smart Grids, Renewable integrations Demonstration programs, matching funds Jeju island test bed Development oppty s MKE directing Smart Meter roll-out 10

6 We have a great head start DMS/OMS real-time data to improve reliability - 69 utilities in 16 countries, including global top 3 utilities Data management from device to enterprise - 300,000 Installations EMS managing transmission networks - Over 100 utilities, servicing 1.3B consumers GIS visualization for network design - More than 1,000 companies, in 40 countries 11 Innovating advanced, holistic solutions for a smarter grid Demand optimization Distribution optimization Working together to provide customer solutions Transmission optimization Asset optimization Workforce & engineering optimization 12

7 Glimpse at the future. Net Zero Energy Homes 13 We re data management experts Private label credit cards Patient records and care tracking Mobile resource management 14

8 New service opportunities Predictive analytics System balancing services O&M contracts M&D Targeted maintenance services Deep outage analytics Transformer maintenance Net metering optimization Storage services Data hosting Data security mgmt. Network operations Customer demand management services Home area network installation & management Total cost of energy management Charging services Billing/metering services Load management 15 Investing for growth 2X increase in new product spend 2X engineering resource expansion and ~35% increase in commercial resources globally 16

9 The smart grid at work here Florida to lead the nation in energy efficiency with $578 million smart grid initiative Hawaii bringing renewables on-line via GE smart grid technologies Ohio leading holistic smart grid, from consumer empowerment to efficiency and security in $150 million project 17 and globally UK: Energy Minister Lord Hunt opens first Smart Grid Center in Europe, demonstrating generation to consumption, at GE Energy s Bracknell headquarters India: NDPL enjoys benefits of GE s outage management systems and advanced geospatial information systems China: Comprehensive and holistic smart grid demonstration in Yangzhou. Sweden: Gothenburg Energy in Western Sweden to implement 90K GE smart meters Australia: SP AusNet becomes first utility in the world to deploy WiMax smart grid solution New Zealand: Utilities deploy distribution management systems to help improve reliability and integrate distributed renewable power 18

10 Positioned for success Strong geopolitical drivers and industry challenges create demand in market Stimulus dollars help drive global global smart grid spending Industry growing at 20% per year GE well positioned to lead 19